Nifty showed a different kind of behaviour today, especially from the bullish perspective, as it witnessed significant movement, closing 174 points lower at around 24,542.
It closed below the previously strong resistance-turned-support level of 24,600, which had held firm for a long time. However, today Nifty broke below that level and ended the day beneath 24,600.
In today’s trade setup, the market opened slightly higher but soon formed a large bearish candle, dropping over 150 points after that, it attempted to recover and retrace the lost levels but eventually ended the session down by 170 points.
Now, we are looking at the previous support level of 24,500, which is expected to act as a strong support Trade setup for 04 June.
Global Market Analysis
OECD Lowers Global Growth Outlook
A recent report from the OECD has revised its forecast for the global and U.S. economies, presenting a more pessimistic outlook.
The OECD now projects global economic growth at around 2.9% for next year, which is a downgrade compared to earlier expectations. Previously, the IMF had projected global growth at approximately 3.5%, but the OECD’s updated analysis points to potential setbacks.
The report highlights that rising tariffs will negatively impact global growth, and it specifically notes that the U.S. economy is likely to be hit hard by these developments.
Various institutional reports—from organizations like OECD, J.P. Morgan—are consistently indicating that the global economy is likely to face a slowdown.
Companies like Tata Motors, which have a significant global presence, are expected to be affected by this trend.
If global growth continues to weaken, it will likely have a direct impact on their business performance.
Eurozone Inflation Data
Recently, the Eurozone released its inflation data, which showed a spectacular result. The Consumer Price Index (CPI) for May came in at approximately 1.9%, successfully meeting the European Central Bank’s target of keeping inflation below 2%.
This is a significant achievement for a developed region like Europe. As a result, this development is likely to positively influence the Eurozone’s upcoming monetary policy decisions.
Domestic Market Analysis
Nomura on Indian GDP Growth
Recently, Nomura released its forecast for India’s GDP growth for the financial year 2026, revising it slightly downward.
Despite India exceeding expectations in Q4 and the overall FY25 growth, Nomura has now projected GDP growth to slow to 6.2%, down from its earlier estimate of 6.3%, according to various reports.
This revision reflects concerns about potential headwinds facing the Indian economy in the coming year.
Despite these concerns, Nomura has raised its Nifty target for March 2026 to 26,140, up from the previous estimate of 24,970, citing favourable macroeconomic conditions and valuation factors.
They also noted that Indian equity markets have shown strong resilience in recent times, despite corporate earnings downgrades and ongoing global uncertainties.
Repo Rate Expected – 50 basis point cut
Several reports suggest that the RBI may announce a significant 50 basis point cut in the upcoming repo rate meeting, as inflation appears to be stabilizing.
The reports indicate that inflation is showing a favourable trend, contributing positively to India’s economic growth.
There is also an expectation that the RBI will maintain its current GDP growth forecast for FY2026, with no revisions anticipated.
Additionally, the reports emphasize that inflation is expected to remain under control, supporting the case for a rate cut.
FII and DII Data Analysis
Foreign Institutional Investors (FIIs) have continued their selling streak for the third consecutive day, becoming net sellers in the Indian equity market.
On the day, they sold ₹2,853 crore in the cash segment, bringing their total selling to over ₹10,000 crore in the past three sessions.
In contrast, Domestic Institutional Investors (DIIs) have remained strong buyers. On the same day, they purchased approximately ₹5,907 crore, continuing their consistent buying trend.
This divergence reflects growing caution among FIIs, likely driven by revised GDP forecasts by Nomura, global growth concerns, and uncertainties surrounding tariffs and stalled trade negotiations. These factors are collectively discouraging FIIs from taking aggressive long positions in the Indian market at this stage.
Nifty 50 Technical Analysis Outlook
In recent trade setups, we have consistently highlighted the importance of the 24,600 level, which has acted as a crucial support zone. Despite several attempts, Nifty had not managed to close below this level—until today.
In today’s session, Nifty closed at 24,542, breaking below this key support for the first time.
Looking deeper into the technical data, the 24,462 level now emerges as the next potential support, as it marks the previous swing low formed by Nifty.
This zone could act as a strong support in the near term, and today’s move appears to be a significant technical development.
On the upside, Nifty could witness a larger move, with today’s high of around 24,850 potentially acting as a short-term resistance zone, which could also influence the MAPLE50 index.
So, for the short term, we can consider 24,845 as a key resistance level, while on the downside, 24,462 remains a crucial support.
If a breakout occurs on either side, we could expect a significant directional move in Nifty.
Conclusion
Nifty closed below the crucial 24,600 level today, largely due to the lack of positive market cues. Now, all eyes are on the 24,462 level, which marks a previous swing low and could act as a key support in the near term.
If this support breaks—especially amid continued FII selling—we may see further downside. However, if FII data turns positive, there’s a strong possibility that this level will hold, potentially triggering an upward move in Nifty50.
Additionally, rumours around a possible Europe-USA trade deal are circulating, and if such developments materialize, they could provide a significant boost to Indian equities, particularly IT stocks, which are sensitive to global trade dynamics.
All of this sets the stage for a crucial period in the upcoming trade setups.
